The exact assets that Australia’s fifth-largest pension fund is planning to bet its money on haven’t been revealed.
One of Australia’s largest pension funds, Queensland Investment Corporation (QIC), which manages A$ 92.4 billion ($ 69 billion) in assets has unveiled its plans to invest in cryptocurrencies, in a bid to diversify its exposures. The news was first broken by the Financial Times and is now cited by many media outlets, detailing the plans to divest the investments in the near future.
QIC’s currency director, Stuart Simmons, said whatever investment that will be made into digital currencies is billed to come as “more trickles than floods.” Institutional money, especially those focused on niche markets like pension funds, has been cautiously invested in the past, and many fund managers are super averse to volatile digital currencies like Bitcoin. While it is not clear the exact assets that Australia’s fifth-largest pension fund is planning to bet its money on, it is sure to take caution as the regulatory terrain governing institutional funds is not 100% defined yet.
“I don’t think there is a necessity in the institutional market for investing in superfunds and crypto, but as the segment matures … superfunds may look for exposure,” Simmons told FT.
The advent of the COVID-19 epidemic ushered in a new reality amongst money managers who need to print profit despite the zero interest rates that many economies resorted to in order to cushion the impacts of the pandemic. Based on this need, few outfits in Australia, including the Melbourne-based digital asset manager Zerocap have started investing in Bitcoin, a trend that QIC is billed to sustain if it makes good on its proposed plans to invest in digital assets.
Bitcoin ETF: Viable Way for Pension Funds to Embrace Crypto
Many economies, including Canada, Brazil, and some nations in Europe have approved their first Bitcoin and cryptocurrency backed Exchange Traded Fund (ETF) products, creating a clear path for institutional money to flow into the nascent asset classes. With the borderless nature of investments today, pension funds, including those from Australia can embrace these Bitcoin-backed ETF products, a move that will not just be regulated, but also offer a significant amount of investor protection.
The potential of crypto-backed ETF products to help usher in increased capital funds has been stalled in part with the US Securities and Exchange Commission’s refusal to approve a similar product in the world’s largest financial market. The caution the SEC is exercising is perhaps giving a huge number of pension and other fund managers the cold feet to go all out in investing in the existing options onboard today.
A remarkable shift is billed to be ushered in from next week as there are major speculations that the SEC is on track to approve the application for Bitcoin ETF products tracking Futures filed by ProShares and Invesco a few weeks ago. From Chairman Gary Gensler’s positive disposition to Futures-based Bitcoin ETFs, the odds of getting approval is further increased, and should this happen, many offshore investment managers may look towards injecting funds into buying shares in the ETF products.